# EUR-Lex - 52013DC0532 - EN

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# 52013DC0532

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Better protection of the Union's financial interests: Setting up the European Public Prosecutor's Office and reforming Eurojust /* COM/2013/0532 final */**

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COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Better protection of the Union's financial
interests:
Setting up the European Public Prosecutor's Office and reforming Eurojust

This Communication introduces a package of
legislative measures to enhance the institutional aspects of protecting the Union's financial interests – and thus taxpayers' money – in accordance with the
Commission's policy established in 2011[1].
The package consists of a proposal for a Regulation on the establishment of the
European Public Prosecutor's Office, and a proposal for a Regulation on the
establishment of the European Agency for Criminal Justice Cooperation
("Eurojust"). In addition, the package includes a Communication on
OLAF's governance and the enhancement of procedural guaranties in
investigations, in view of establishing the European Public Prosecutor's Office.

1.           The main aims to be achieved
by creating a European Public Prosecutor’s Office and reforming Eurojust

Ÿ   Fighting fraud: a priority in times of fiscal consolidation

At a time when many Member States are
implementing fiscal adjustments which place considerable burdens on many citizens,
it is more important than ever to make sure that the European Union's financial
interests – which are provided by the taxpayer – are effectively protected. By establishing
the European Public Prosecutor's Office as proposed in this package, it will be
possible to introduce for the first time an entity which will have the powers
and the resources necessary to investigate, prosecute and bring cases of fraud
and other illegal activities affecting the financial interests of the Union,
whether national or cross-border, to courts.

It will overcome the functional limitations
of the existing Union bodies and agencies because it will be a genuine
investigation and prosecution body capable of acting throughout the Union in a uniform way.

Ÿ   Making prosecution at EU level more accountable

The proposals in this package will take
advantage of the provisions of the Lisbon Treaty, which gave the Union a unique competence with Article 86 TFEU to create a system of European prosecution
for protecting its financial interests and with Article 85 TFEU to enhance
Eurojust's efficiency and the democratic oversight of its activities.

In fact, the proposals seek to achieve
greater accountability in two ways. Firstly, while fully independent, the European Public Prosecutor's Office will be accountable to the Union
institutions, with a requirement to give an annual account on its activities. Secondly, as a consequence of the Lisbon Treaty, the European
Parliament and national Parliaments will in the future be involved in the
evaluation of Eurojust’s activities. This improvement in democratic accountability
of Eurojust is included in the proposed Eurojust Regulation. The future European
Public Prosecutor Office will give an annual report of its activities to the
European Parliament and to national Parliaments, as well as to the Council and
the European Commission.

Ÿ   The level of protection for those involved in investigations has to
be raised

The European Public Prosecutor's Office is
to be set up in a way that provides for the rule of law to be upheld at all the
stages of investigations and prosecutions. To achieve this, the proposal
ensures that the principles recognised in particular by the Charter of
Fundamental Rights of the European Union are respected and thus seeks to provide
a high level of protection of the rights of the individuals and companies
affected by fraud investigations or prosecutions. Therefore, the text includes
a series of Union-level procedural safeguards, such as access to a lawyer as
well as to obtain judicial authorisation in case of particularly intrusive
investigation measures.

2.           Why these reforms are necessary
to overcome the status quo?

Ÿ             The current system does not protect the Union's financial interests sufficiently

The existing national-level and Union-level
efforts fail to address properly the problem of fraud against the Union's financial interests. The Union and the Member States have a duty to "counter
fraud and any other illegal activities affecting the financial interests of the
 Union" and "afford effective protection" to those interests.[2] This duty is particularly
relevant in times of fiscal consolidation where every Euro counts. Despite this
clear obligation, imposed by EU treaties and the case-law of the European Court
of Justice,[3]
the Union's financial interests remain insufficiently protected in Member
States: fraud, corruption and other offences affecting the Union's budget are
significant and largely non-prosecuted. The Commission has identified an
average of about €500 million of suspected fraud in each of the last three
years, but the actual amount of fraud is likely to be significantly higher. The
lack of a Union-wide comprehensive and equivalent enforcement system has
allowed a certain sense of impunity to emerge among fraudsters.

Today, the Union has virtually no power to
intervene in cases of criminal misuse affecting its funds. Criminal
investigations or prosecutions concerning offences affecting such funds are still
under the exclusive competence of the Member States. Research[4] and statistics[5] show that criminal investigations
into fraud against the Union’s financial interests are often hampered by
divergent legislation and uneven enforcement efforts in the Member States. The
rate of successful prosecutions concerning offences against the EU budget
varies considerably across the EU (from approximately 20% to over 90%)[6], partly owing to the complexity
of the cases, the lack of sufficient national resources and the frequent need
to gather evidence outside the national territory. This shows a significant gap
in the efficiency of national law enforcement systems in the area of fraud
against the Union’s financial interests.

These shortcomings cannot be addressed
within the existing national or European structures. National law enforcement
and prosecution agencies can only act within national boundaries. This limits
their ability to tackle cross-border crimes. And whereas Union agencies have
Union-wide competences, they lack the power to conduct investigations and
prosecutions in the Member States. European bodies, such as Eurojust, Europol
and OLAF, may only act within the limits of their respective competences and
functions foreseen by the Treaty, which the forthcoming reforms will not
change. None of these bodies has or can be granted the powers to conduct
criminal investigations or prosecute offenders.

In addition, fighting fraud against the Union's financial interests is not recognised as a priority at national level. This is
particularly acute in cross-border fraud cases. Disincentives may exist even in
purely national cases: priorities are set at national or regional level where
the available law enforcement resources or expertise focus on other types of
criminality. As a result, there is little pressure to deal with fraud against
the Union's financial interests and the criminal enforcement cycle breaks down.
The offences detected are not investigated, or if they are, they are dropped
once difficulties appear.

Ÿ             Eurojust needs reform

Eurojust needs reform to overcome the
deficiencies in the implementation of its current framework, and thereby improve
its overall functioning and become more operational. The reform will clearly
distinguish the operational tasks of the Eurojust College[7] from administrative
responsibilities enabling it to focus on the operational tasks without having
to tackle many administrative issues. Provision is made for the establishment
of an Executive Board in order to assist the College with its administrative
tasks. The transformation of the Eurojust Decision into a Regulation in
accordance with the TFEU also provides an opportunity to ensure that the powers
of national members are further harmonised and align the structure of Eurojust
with the standards laid down in the Common Approach on EU decentralised
agencies endorsed by the European Parliament, Council and the European
Commission in July 2012.

Ÿ   The establishment of the European Public Prosecutor's Office and the
reform of Eurojust must build on the Lisbon Treaty

The proposals in this package will take
advantage of the possibilities introduced by the Lisbon Treaty, in particular in
Article 86 TFEU and Article 85 TFEU. An important novelty of the Lisbon Treaty
is the participation of the European Parliament and national Parliaments in the
evaluation of Eurojust’s activities. This improvement in the democratic accountability
of Eurojust is included in the proposed Eurojust Regulation.

Making use of both Articles simultaneously
means that the best possible synergies need to be made between the European Public
Prosecutor's Office and the reformed Eurojust. This is not only necessary
because Article 86 TFEU stipulates that the European Public Prosecutor's Office
should be established "from Eurojust", but also because the two
organisations will need to work very closely together on cases falling within
their respective competences.

Since the objective of this package is to
improve the protection of the Union's financial interests, the implementation
of Article 86 TFEU, combined with an efficiently functioning Eurojust, is
considered the optimal solution. Only the possibility to establish a European
Public Prosecutor's Office under Article 86 TFEU provides the full range of
measures necessary to adequately investigate and prosecute EU fraud. For
instance, the European Public Prosecutor's Office will have the power not only
to initiate investigations, but also have them carried out under its oversight
and responsibility. The powers of the European Public Prosecutor's Office go
beyond what Eurojust could ever do, even if the maximum use had been made of
Article 85 TFEU.

The package supplements and reinforces the
measures already put forward by the Commission to enable the Union to prevent
and combat fraud and other offences affecting its financial interests
("fraud against the Union's financial interests"). These measures
include the legislative proposal for a Directive on the harmonisation of the
relevant offences and minimum sanctions[8]
and the Commission's Anti-Fraud Prevention Strategy[9]. This package specifically
addresses issues identified in the 2011 Communication[10] in the area of criminal
prosecution. Two years on from the release of this important Communication,
action on these issues, such as this package, is even more pressing.

3.           Benefits of the European Public
Prosecutor's Office

Key features of the European Public Prosecutor's Office The European Commission’s legislative proposal seeks to set up the European Public Prosecutor's Office from Eurojust as an office of the Union, which is independent, accountable and efficient. The European Public Prosecutor's Office will be a decentralised structure composed of a European Public Prosecutor and European Delegated Prosecutors in Member States. In order to make the European Public Prosecutor's Office efficient, the European Public Prosecutor will provide central steering and instructions to European Delegated Prosecutors, who will work directly for him on offences falling within the competence of the European Public Prosecutor's Office while remaining integrated in the judicial systems of the Member States (“double-hat”). This will ensure consistency, coordination, speedy action and continued oversight of ongoing investigations and prosecutions. The European Public Prosecutor's Office will act in a decentralised way: cases will be treated at the most appropriate level, which in most cases will be that of the European Delegated Prosecutor, in the Member States. Choosing a decentralised structure which will be integrated in the judicial systems of the Member States will ensure that the European Public Prosecutor's Office acts fast, consistently and efficiently to protect taxpayers' interests and integrate smoothly into national justice systems and rely on their expertise and resources. The European Public Prosecutor's Office will rely on a small body of EU wide rules – for the scope of the crimes in its competence[11], for uniform powers and protection of procedural rights – and on national law for the execution of its tasks. As an independent structure, the European Public Prosecutor's Office will provide safeguards that nobody can unduly interfere with its investigations and prosecutions. As an accountable body, the European Public Prosecutor's Office will be responsible to the Union institutions, with a requirement to give account on its activities annually. Setting up the European Public Prosecutor's Office "from Eurojust" means the optimum synergies will be created between this newly established Office and the reformed Eurojust.

Ÿ             Fixing institutional weaknesses at national and
Union level

The European Public Prosecutor's Office will
have the powers and the resources necessary to investigate, prosecute and bring
its cases, whether national or cross-border, to courts. It will overcome the
functional limitations of the existing Union agencies: it will be a genuine
investigation and prosecution body capable of action throughout the Union in a uniform way. While national procedures for criminal investigations will continue
to apply, the Union will be considered as one single legal area in which the European
Public Prosecutor's Office can act without having to resort to instruments of
mutual legal assistance. This will trigger significant gains in the speed and
efficiency of the investigation and prosecution process compared to the current
situation.

Ÿ             Improving prosecution

The European Public Prosecutor's Office will
ensure consistency and coherence throughout the law enforcement cycle: once
detected, the European Public Prosecutor's Office will systematically follow-up
cases within its competence until they are brought to court. It will restore
the enforcement cycle and ensure that one phase follows the other until the
case ends up in trial at court. Its investigations, in respect of which the European
Public Prosecutor's Office will be able to rely on Europol’s analysis and
intelligence, and its prosecutions will be driven by a common European
prosecution policy based on a Union-wide competence. Such Union-wide competence
will allow more efficiency in cross-border cases by steering, coordinating
enforcement action and ensuring that the available resources are optimally
used.[12]

Ÿ             Enhancing the deterrent effect of criminal
prosecutions

The European Public Prosecutor's Office will
ensure that every suspected offence against the Union's financial interests
will be systematically and efficiently followed up by law enforcement and
prosecution authorities. Deterrence will improve as a result of the systematic prosecution
of fraudsters, increasing the chances of conviction and the recovery of
criminal proceeds through confiscation. Ultimately, the prosecutions brought by
the European Public Prosecutor's Office should also have a preventive effect and
gradually reduce the volume of the damage caused to the Union’s financial
interests by such criminal offences.

Ÿ             Conducting fraud investigations and prosecutions in
accordance with the Rule of Law

The proposal on the European Public
Prosecutor's Office ensures that the principles recognised in particular by the
Charter of Fundamental Rights of the European Union are respected and thus
seeks to provide a high level of protection of the rights of the individuals
and companies affected by fraud investigations or prosecutions in the Union. It includes a series of Union-level procedural safeguards, such as access to a lawyer,
the right to be presumed innocent and the right to legal aid. It also requires
that investigation measures be subject to judicial authorisation by the
competent national courts. The data protection regime of the European Public
Prosecutor's Office will provide a high-level protection for personal data,
much in the same way as Eurojust’s data protection regime. Taken together,
these safeguards will provide an unprecedented level of legal protection for
suspects and other persons involved in the Union’s efforts to combat fraud
against the Union’s financial interests and enable a system of investigations
and prosecutions based on the Rule of Law.

4.           The main elements of the
Proposal on the European Public Prosecutor’s Office

Focused competence on fraud against the Union’s financial interests: in accordance
with Article 86 (1) TFEU, the European Public Prosecutor's Office would exclusively
deal with “crimes affecting the financial interests of the Union”. In that area,
the competence of the European Public Prosecutor's Office would be exclusive so
that it can ensure consistency and oversee investigations at Union level. Given
this exclusive competence, such cases can no longer be subject of
administrative investigations by OLAF, or if they are, they must be transferred
in cases where a criminal suspicion arises.

Independence and accountability: the independence of
the European Public Prosecutor's Office will be protected by various
safeguards, in particular through its appointment and dismissal procedures,
rules on tenure and conflicts of interests. Its accountability will be
regulated in a way that the appointing authorities (Union institutions) are
kept informed about the work of the European Public Prosecutor's Office and can
ask the Court of Justice of the European Union to remove the European Public
Prosecutor in case of serious misconduct.

Lifting of immunities: where necessary for its investigations, the European Public
Prosecutor's Office will have the power to request the lifting of immunity,
whether at national or at Union-level, in accordance with the applicable rules.

Decentralised and integrated
architecture: the European Public Prosecutor's
Office will be organised as a decentralised office and thus have a presence,
and the ability to act, in all Member States. The European Delegated
Prosecutors, integrated in the judicial systems of the Member States, will be
capable of relaying, coordinating and implementing the European Public Prosecutor’s
instructions on the ground. The European Public Prosecutor's Office will
cooperate closely with the national law enforcement, prosecution and judicial
authorities. This decentralised structure has many advantages, in particular
the integration into national justice systems (knowledge of national justice
system, knowledge of local language, recognition by and integration into local
prosecution structure, practice in handling local court cases, etc.). The
decentralised architecture will also be reflected in the way the European
Public Prosecutor's Office adopts its internal rules by ensuring the
participation of European Delegated Prosecutors in the adoption process.

Strong link between the European Public
Prosecutor and the European Delegated Prosecutors: as
a single office, the European Public Prosecutor's Office will be supported by a
hierarchical structure. It will be directed by the European Public Prosecutor
with the authority to instruct the “double-hatted” European Delegated Prosecutors
on the ground in Member States when they work on offences within the competence
of the European Public Prosecutor's Office.

Efficiency: the
European Public Prosecutor, assisted by his Deputies and the European Delegated
Prosecutors, takes the final decision on prosecution. Clear hierarchical lines
ensure swift decision-making and will overcome the current low level of priority
accorded to fighting EU fraud. The European Public Prosecutor's Office will be
able to pool investigative and prosecutorial resources to address the needs in
a given situation, thereby making law enforcement at European and national
level more efficient.

Uniform investigation powers: the European Public Prosecutor's Office will be able to employ a
wide range of investigative measures to investigate fraud. These measures can
be ordered in all Member States in order to ensure an equivalent fight against
fraud throughout the Union. The specific conditions and exercise of these
measures will continue to be governed by national law. As the difference in
national rules of gathering evidence often leads to problems of admissibility
of evidence gathered in another Member State, it will be stipulated that evidence
gathered lawfully in one Member State shall be admissible in all Member States,
unless the fairness of the proceedings or the rights of defence are adversely
affected.

Safeguards and judicial review: the exercise of investigative powers must be accompanied by a
system of judicial review and measures to safeguard the rights of suspected
persons, witnesses and victims. For a series of most intrusive investigative
measures (such as searches and seizures, interceptions of telecommunications,
covert investigations), there will be an EU level harmonised requirement for
the European Public Prosecutor’s Office to obtain a prior judicial
authorisation to undertake them. The rights of persons involved in the
investigations of the European Public Prosecutor's Office will be guaranteed
through the application of Union legislation and national law, and by relying
on national courts. Again, this has the advantage that both the European Delegated
Prosecutors and the legal representatives of the persons involved will be
working within a familiar national system, ensuring that their rights are
protected in a manner with which they are accustomed.

Building on existing resources: the European Public Prosecutor's Office will not generate
substantial new costs for the Union or the Member States, as its administration
services will be handled by Eurojust and its human resources will come from
existing entities such as OLAF, as it will no longer carry out administrative
investigations on criminal cases involving the Union's financial interests. This
change also affects the number of staff required for the tasks of OLAF: it is
foreseen that a significant number of OLAF staff will be moved to the European
Public Prosecutor's Office, thus reducing the costs of its setting up. Despite
this reduction of staff, adequate staffing will remain at OLAF to enable it to exercise
its remaining competences.[13]
The overall costs of law enforcement will be more balanced as a result of
efficiency gains (duplications can be avoided, investigation time reduced and
problems of mutual assistance eliminated).

5.           Synergies between the European
Public Prosecutor’s Office and Eurojust

Article 86 TFEU stipulates that the European
Public Prosecutor's Office must be created “from Eurojust” and there are good
reasons for creating a privileged partnership between the two:

Ÿ             Transferring Eurojust’s cases of fraud against the Union’s interests to the European Public Prosecutor's Office. As the European Public
Prosecutor's Office will have exclusive competence in the area of fraud and
other offences affecting the Union’s financial interests, Eurojust’s competence
in this area (coordination of judicial cooperation in cross-border cases) will
be transferred to ensure consistency.

Ÿ             Dealing with hybrid cases requires daily operational
coordination. There are, and will always be, cases where both the European
Public Prosecutor's Office and Eurojust need to be involved, in particular
cases where the suspects are involved in both crimes affecting the Union’s
financial interests and other forms of crime. This implies that there will be a
need for continuous close cooperation. To ensure that this takes place,
provisions have been included in both the Regulation on the European Public
Prosecutor's Office and the Regulation on Eurojust, setting out that this Office
can request that Eurojust, or its national members, intervene, coordinate, or
otherwise use their powers in a given case. In addition, in cases of
overlapping competence in hybrid cases, Eurojust may provide assistance in
settling the question of jurisdiction.

Ÿ             Cost-efficiency requires sharing resources. It is
envisaged that Eurojust will provide practical support services to the European
Public Prosecutor's Office in administrative issues, such as personnel, finance
and IT. This approach delivers considerable cost savings, and counteracts unnecessary
duplication of functions. One example of such cost savings is that the European
Public Prosecutor's Office will be able to use the IT infrastructure of
Eurojust, including using its Case Management System, temporary work files and
index. The details of this arrangement will be laid down in an agreement
between the European Public Prosecutor's Office and Eurojust.

6.           The impact of the European
Public Prosecutor’s Office on Olaf

Given the exclusive competence of the European
Public Prosecutor's Office to deal with criminal offences affecting the Union’s financial interests, OLAF will not conduct administrative anti-fraud investigations
where there are suspicions of a criminal behaviour. It also follows that, in
the future, OLAF will report suspicions of such criminal offences, at the
earliest stage, following a preliminary evaluation of allegations brought to
its attention in accordance with the current legal framework, to the European
Public Prosecutor's Office. This change will facilitate a speedier
investigation process and will help to avoid duplications of administrative and
criminal investigations into the same facts. In this way, resources will be
saved and the chances of a successful prosecution increased. Further
adjustments to OLAF's legislative framework will be proposed to take account of
the establishment of the European Public Prosecutor's Office and should enter
into force concurrently with the Regulation setting it up.

In the meantime, substantial benefits will
be achieved through the revised OLAF Regulation, which will very soon enter
into force. Furthermore, taking inspiration from the substantial reinforcement
of procedural guarantees, that will be brought about by the establishment of
the European Public Prosecutor's Office, the Commission intends to propose
further systemic improvements of the OLAF Regulation even before the European
Public Prosecutor's Office is established. These possible measures, in
particular the procedural safeguards in investigations, are spelt out in more
detail in the Communication on OLAF's governance.

7.           Adoption procedure for
the proposal on the European Public Prosecutor’s Office

Article 86 TFEU provides for a special
legislative procedure to establish the European Public Prosecutor's Office,
which requires unanimity in the Council and the consent of the European
Parliament. In addition, national Parliaments will, in accordance with Protocols
No. 1 and No. 2 of the Lisbon Treaty, be consulted. The Commission will take
utmost account of these opinions.

The procedure under Article 86 TFEU also
foresees a second step based on “enhanced cooperation”, should the Council fail
to agree unanimously on the initial Commission proposal. In essence, this
procedure enables a group of at least 9 Member States to refer the proposal to
the European Council, which either comes to a consensus on the text or, after 4
months, is deemed to have granted authorisation to a group of 9 Member States
willing to proceed with enhanced cooperation. This procedure differs from
“ordinary” enhanced cooperation in that it does not require a formal Council
authorisation. The relevant Treaty provisions (Articles 326-334 TFEU) otherwise
apply. The participating Members States need to unanimously agree to adopt the
proposal.

8.           Conclusion

The legislative package submitted by the
Commission with this Communication is both ambitious and forward-looking. It
will change the current landscape of law enforcement and criminal justice in
the Union and its Member States. Once adopted, this package will have a substantial
and long-term impact on the legal framework and institutional set up of the Union's area of freedom, security and justice. The Commission will in due course carefully
take stock of the extent to which the objectives of the measures have been
realised. This review will also examine the mandate of the European Public
Prosecutor's Office and the legal regime applicable to its activities.

[1]               On the protection of the financial interests of the
European Union by criminal law and by administrative investigations", 26
May 2011, COM(2011) 293.

[2]               Article 325 TFEU.

[3]               21 September 1989, Case 68/88, Commission v. Greece [1989] ECR 2965.

[4]               Euroneeds study. A preliminary report of this study
can be downloaded from the website of the Max Planck
Institute for Foreign and International Criminal Law (http://mpicc.de).

[5]               OLAF 10-year activity report.

[6]               OLAF Annual report 2011 - figures do not include
Member States with rates 0% and 100%. EU average: 43%.

[7]               The College is composed of National Members,
one from each of the European Union’s Member States. The College of Eurojust is
responsible for the organisation and operation of Eurojust. Eurojust may fulfil
its tasks through one or more National Members or as a College.

[8]               Proposal for a Directive of the European Parliament
and of the Council on the fight against fraud to the Union's financial
interests by means of criminal law, 11 July 2012, COM(2012) 363.

[9]               COM (2011) 376.

[10]             Communication from the Commission "On the
protection of the financial interests of the European Union by criminal law and
by administrative investigations", COM(2011) 293 of 16.5.2011.

[11]             Commission proposal for Directive of the European
Parliament and Council on the fight against fraud to the Union's financial
interest by means of criminal law – 11.7.2012 – COM(2012)363 of 11.7.2012.

[12]             The European Parliament – in its Resolution of 11 June
2013 "on organised crime, corruption, and money laundering:
recommendations on action and initiatives to be taken" calls for the
establishment of a European Public Prosecutor's Office underlining "that
the future office should have an efficient and streamlined structure ...".

[13]             Proposal for a Regulation amending Regulation (EC) No
1073/1999 concerning investigations conducted by the European Anti-fraud Office
(OLAF) and repealing Regulation (EURATOM) No 1074/1999, 17 March 2011,
COM(2011) 135.